Gold News & Info

Source: Marketwatch.com

San Francisco— Gold futures closed at their highest level since mid-August on Friday, logging a gain of over 1% for the week on concern that the Federal Reserve will slow the pace of interest rate increases weighed on the U.S. dollar.

Overall, "speculation the Fed may curb its interest rate increases to help combat the cost of oil and the devastation left by Hurricane Katrina have put the dollar under continued pressure," said James Moore, an analyst at TheBullionDesk.com in London.

Metals trading on the New York Mercantile Exchange closed by 12:10 p.m. Eastern and will remain closed for Monday's Labor Day holiday.

On Friday, gold for December delivery closed at $448.50 an ounce, a level not seen since August 16. It was up $2 for the session, and up $6.40 from the week-ago close of $442.10.

Other metals closed mainly higher for the day and week.

September silver futures closed up 4.2 cents at $7.008 an ounce. That's up almost 4% for the week. Copper for September delivery closed at another record $1.747 a pound, up 2 cents for the day and up 3.2% from last Friday's close.

The September palladium contract fell 55 cents to end at $183.40 an ounce. October platinum closed at $911.50 an ounce, up $8.10. Both closed higher for the week, up 0.5% and up 1.5%, respectively.

"The ripple effect from Hurricane Katrina may be far reaching," said William Adams, an analyst at BaseMetals.com, adding that the storm has "already sent fuel prices soaring which are going to hurt the U.S. consumer and therefore the economy."

"The impact may even be enough to cause the Fed to pause its interest rate rises, which could lead to further dollar weakness," he said.

On the surface, this could be supportive for the metals, "but is the energy shock going to be the catalyst that starts a faster slowdown in U.S. growth? If it does it will no doubt have a knock on effect to global demand which in turn would be negative for the metals," he warned.